The price of tomatoes in India has surged in recent weeks, creating a significant conundrum for consumers and the economy alike. With prices reaching almost 200 rupees per kilo in certain regions, the expensive tomatoes have led to widespread havoc, impacting household budgets, and commercial operations, and even sparking incidents on the streets, BBC reports.
The unavailability of quality tomatoes due to seasonal crop issues has prompted major chains like McDonald's to remove tomatoes from their menus in northern and eastern India.
The escalating prices have particularly affected India's middle and lower classes, which make up a significant portion of the population. Instances of conflicts over tomato prices have emerged, such as a vegetable seller allegedly resorting to physical violence against a customer in Pune and a politician hiring bouncers to prevent haggling in Varanasi.
Reports of tomato theft and hijacking of tomato-laden trucks have also surfaced. Experts attribute the price surge to adverse weather conditions, resulting in damaged crops, shortages in the market, and a mismatch between demand and supply.
To alleviate the impact on consumers, some states have initiated the sale of tomatoes at reduced prices through government-run or farmer-backed outlets. Additionally, the Indian government launched the Tomato Grand Challenge Hackathon to encourage the public to contribute ideas for addressing the issue. Economists express concerns that the steep price rise could disrupt India's inflation balance, potentially pushing retail inflation towards 5.5% in the coming months.
Ironically, just a couple of months ago, farmers faced the opposite situation when prices crashed to 2-3 rupees per kilo due to oversupply. The supply-demand challenges of perishable vegetables like tomatoes and onions are not uncommon in India, as both crops are grown throughout the year, with produce from different states hitting the market at different times. This year, a bumper crop of tomatoes was followed by a poor harvest season, exacerbating the situation.
Experts highlight the need for strategic interventions to overcome the supply-demand gap. Incentivizing protected cultivation methods to mitigate the impact of extreme weather and promoting tomato processing, such as converting them into puree, are potential solutions. Lowering the general sales tax (GST) on tomato puree and adopting a comprehensive value chain approach is crucial for stabilizing supply and reducing risks from production to consumption.
Addressing the challenges posed by highly perishable tomatoes requires collaboration among various stakeholders in the agricultural sector to ensure stability, availability, and affordability for consumers. The Indian government must consider these measures to tackle the current tomato crisis and safeguard the economy from further disruptions.
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